VANCOUVER, Nov. 3, 2011 /CNW/ - The State of Alaska has filed a constitutional challenge in Alaska Superior Court to strike down a municipal ordinance recently enacted by ballot measure in Southwest Alaska's Lake & Peninsula Borough.

By a margin of just 34 votes, local voters supported a ballot measure put forward by anti-Pebble activists that would restrict future development that affects more than one square mile of land within the 31,000 square mile borough.

In a statement, the Alaska Department of Law argues that the Lake & Peninsula Borough ordinance is invalid as it seeks to "nullify state permitting processes and prevent the development of certain large-scale resource development activity….

While boroughs have limited power to regulate some of the activities associated with resource development, a small majority of voters in a local community cannot usurp the more comprehensive state authority and eliminate the entire state permitting process."

The Pebble Limited Partnership (the "Pebble Partnership" or "PLP") previously initiated a legal challenge against the ballot measure and resulting ordinance.

Proceedings are set to begin in Alaska Superior Court on November 7, 2011.

In addition to PLP and the State of Alaska, the municipal ordinance is opposed by a broad spectrum of Alaska interests, including a group of four Alaska Native village corporations representing seven Lake & Peninsula Borough communities whose private land holdings would be affected. It is also opposed by the Resource Development Council for Alaska, the Alaska State Chamber of Commerce, the Alaska Miners Association, the Council of Alaska Producers, the Alaska Oil and Gas Association, Alaska Industry Support Alliance, among others.

"We agree that development of state-owned resources on state lands in Alaska should not be restricted by municipal ordinance, particularly when the basis for such legislation is a misleading ballot measure that would have disastrous consequences for Southwest Alaska," said Ron Thiessen, President & CEO of Northern Dynasty Minerals Ltd. ("Northern Dynasty") (TSX: NDM) (NYSE Amex: NAK). "This is a region that badly needs investment in new economic opportunities, particularly those that respect regional needs, address key environmental concerns and demonstrate they can be safely developed in collaboration with a robust fishery.

"Ultimately, we believe the State of Alaska's constitutional obligation to manage natural resources on state land for the benefit of all Alaskans will prevail over the unconstitutional efforts of narrow self-interests to restrict development in a region the size of South Carolina."

Thiessen said the Pebble Partnership will continue to invest in the State of Alaska with the goal of finalizing a Prefeasibility Study for the Pebble Project and initiating federal and state permitting under the National Environmental Policy Act (NEPA) in late 2012. He said court proceedings related to the ordinance will advance in parallel with efforts to design an environmentally sound and socially responsible project that co-exists with clean water, healthy fisheries and traditional ways of life in Southwest Alaska.

The Lake & Peninsula Borough ballot measure was sponsored by paid opponents of the Pebble Project, whose goal is to halt the project before it completes a Prefeasibility Study and initiates federal and state permitting.

"(This case) is about upholding the State's constitutional authority and responsibility to evaluate whether, on balance, development of Alaska's resources is beneficial to all Alaskans," said Alaska Attorney General John Burns. "This administration has consistently maintained that the State will not sacrifice one resource for another. In the case of Pebble, we haven't yet even considered the pros and cons of any development that may be proposed. But the Alaska Constitution requires the State - not the borough - to fairly and completely conduct this evaluation.

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